FORTRESS INVESTMENT GROUP SHUTTING DOWN PART OF HEDGE-FUND BUSINESS – SOURCES

By Rob Copeland

Fortress Investment Group LLC is liquidating part of its hedge-fund arm, according to people familiar with the matter, the latest hit to a business that has increasingly become a drag on the firm.

Fortress is selling off all investments that it makes in other hedge-fund managers through its Partners funds, the people said. That unit was created to emulate the bets of university endowments and other deep-pocketed investors, and managed $1.7 billion at its peak in 2010. But the Partners funds have slumped in recent years, recently managing about $400 million, one of the people said.

The remainder of the Partners funds cash, which is split between other private-equity firms and direct stakes in private companies and projects, is likely to be wound down in the coming years, the person said.

Fortress has performed poorly of late across its entire “liquid markets” business, led by firm co-founder Mike Novogratz. Mr. Novogratz’s main macro hedge fund is down 15% this year through early September, according to an investor update.

Write to Rob Copeland at rob.copeland@wsj.com

Breaking the story

Rob Copeland broke the news that Fortress Investment Group LLC is selling off all investments that it makes in other hedge-fund managers through its Partners funds. That unit was created to emulate the bets of university endowments and other deep-pocketed investors, and managed $1.7 billion at its peak in 2010. But the Partners funds have slumped in recent years, recently managing about $400 million, according to sources.

Timeline

September 21, 2015, 11:56

Fortress Investment Group Shutting Down Part of Hedge-Fund Business – Sources

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